AGDC board approves $102M spending plan for gasline projects

Alaska Gasline Development Corp. President Keith Meyer testifies to a joint Resources Committee hearing on June 29, 2016, in Anchorage. On Feb. 9, the AGDC board of directors approved a $102 million spending plan for the next 18 months, but Meyer said the state-owned company will likely need more in 2018 to complete part of the federal permitting process. (Photo/Michael Dinneen/For the Journal)

There is a $102 million spending plan for Alaska’s gasline projects.

The Alaska Gasline Development Corp. board of directors unanimously approved the budget at its Thursday meeting in Anchorage. The plan would exhaust the state’s two gasline funds over the next 18 months or so.

The $102 million is what remains from previous appropriations to advance the Alaska LNG Project, a $45 billion export effort, and the smaller Alaska Stand Alone Pipeline project, or ASAP, which is a backup line focused on getting natural gas to in-state customers.

About $26 million is left in the ASAP fund from a 2013 appropriation of $355 million. Legislators pulled $157 million from the ASAP fund and used it for school funding in 2015 when the state’s budget deficit exploded and Gov. Bill Walker tussled with Republican leaders in the Legislature over his ideas for the project.

The other $76 million is in the Alaska LNG Project fund and is already dedicated to the large project being pursued by the state-owned corporation.

AGDC President Keith Meyer said the corporation will not be asking for additional funding from the Legislature this year — which must resolve the state’s nearly $3 billion budget deficit soon — but it will request a reappropriation of $14 million this year from the ASAP fund to the Alaska LNG fund so the money can legally be spent on the large project.

The remaining cash in the ASAP fund will go toward finishing the federal permitting process for the ASAP project over the next year, which also has significant value for the larger project, AGDC officials told legislators in hearings in late January.

The $100 million-plus, two-year FERC licensing process will require additional funding from the Legislature in early 2018, at which point Meyer hopes to have customers lined up to prove the project’s viability.

Legislators have expressed bipartisan hesitancy in funding the project further since the Walker administration said the state would take the lead role in the daunting endeavor from it former equity partners, BP, ConocoPhillips and ExxonMobil.

Also late last month BP agreed to support the state’s Alaska LNG effort in a reduced role from the previous joint-venture partnership.

Meyer said the rest of 2017 will be spent attracting Asian utility customers to the project, as well as applying for the Alaska LNG Project’s official license to operate from the Federal Energy Regulatory Commission, which AGDC hopes to submit in June.

AGDC has an Alaska LNG Summit planned for March 1-6 to bring potential customers to Alaska and show them the North Slope and LNG plant site in Nikiski as well as provide briefings on the project from state agencies, BP, ConocoPhillips and others.

AGDC will also be looking to contract with a financial advisor firm with experience in the LNG industry to make sure the multiple customer and financing contracts needed to support the project are compatible, according to Meyer.

Finally, on the technical side, the corporation is in talks with large engineering, procurement and construction, or EPC, firms that could provide a final cost estimate in 2018 and eventually manage the construction.